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Barriers to Internet banking adoption: a qualitative study among corporate

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Article  in  International Journal of Bank Marketing · December 2003

DOI: 10.1108/02652320310498465

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Barriers to Internet banking adoption: a qualitative
study among corporate customers in Thailand

Siriluck Rotchanakitumnuai
Department of Management Information Systems, Faculty of Commerce and
Accountancy, Thammasat University, Bangkok, Thailand
Mark Speece
School of Management, Asian Institute of Technology and Graduate School,
Bangkok University, Bangkok, Thailand

Keywords Ongkasuwan and Tantichattanon, 2002;

Internet, Banking, Introduction Rotchanakitumnuai et al., 2003).
Electronic commerce, Thailand,
Consumer organizations In recent years, the banking sector has been Among corporate customers, the situation
an interesting case for service innovation as seems to be similar, though somewhat less
Abstract it moves toward using the Web for researched. Corporate customer interactions
Many Thai banks are currently are considered to have become more
implementing Internet banking. commercial purposes through Internet
intensive and complex because they involve
Banks that offer service via this banking. Internet banking allows customers
channel claim that it reduces relationships between firms and banks
to have direct access to their financial
costs and makes them more (Athanassopoulos and Labroukos, 1999).
competitive. However, many information and to undertake financial Bank corporate clients require complex
corporate customers are not transactions with no need to go to the bank. banking needs, but they also provide the
highly enthusiastic about Internet ACNielsen (2002) found that Internet banking
banking. An understanding of why
greatest profit opportunities to the bank
corporate customers do not
is expanding in many Asian countries, (Tyler and Stanley, 1999; Zineldin, 1995).
accept Internet banking can including South Korea, Hong Kong, These important big volume customers have
assist banks to implement this Singapore, China, and Taiwan. Thai banks not adopted Internet banking to any great
self-service technology more
have followed worldwide trends in extent. The potential value to be gained by
efficiently. In-depth qualitative
interviews with Thai firms suggest implementing self-service technology via the customer adoption of Web-based service
that security of the Internet is a Internet, although as a still developing delivery seems to depend on overcoming
major factor inhibiting wider
country, Thailand is slightly behind the more some important barriers to usage.
adoption. Those already using Relatively little research has addressed the
Internet banking seem to have developed Asian countries.
more confidence that the system From the banks’ viewpoint, use of Internet issue of barriers to Internet banking
is reliable, whereas non-users are adoption. Prior studies frequently focus on
banking is expected to lead to cost reductions
much more service conscious, and positive aspects of Internet banking, e.g.
and improved competitiveness. This service
do not trust financial transactions benefits (Polatoglu and Ekin, 2001; Suganthi
made via Internet channels. Non- delivery channel is seen as powerful because
et al., 2001), trust (Suh and Han, 2002),
Internet banking users tend to it can retain current Web-based customers
have more negative management innovations (Gerrard and Cunningham,
who continue using banking services from
attitudes toward adoption and are 2003). In addition, Internet banking research
any location. Moreover, Internet banking
more likely to claim lack of has tended to focus on the perspective of
resources. Legal support is also a provides opportunities for the bank to personal account customers (Gerrard and
major barrier to Internet banking develop its market by attracting a new Cunningham, 2003; Ongkasuwan and
adoption for corporate customers. customer base from existing Internet users
Tantichattanon, 2002; Polatoglu and Ekin,
(Suganthi et al., 2001; Dannenberg and 2001; Suganthi et al., 2001). There is little
Kellner, 1998; Zineldin, 1995). published work on perceptions of corporate
This is, however, merely theory so far. customers about barriers to Internet
Things have not moved as quickly as some banking, particularly in the context of
anticipated in turning this into reality in the developing countries in the dynamic Asian
banking sector. Some research shows that region. Information technology (IT)
most consumer banking customers rank resources in much of Asia are somewhat less
Internet banking as less important than well developed than in the West, and the role
other technology-based delivery channels, of personal relationships is somewhat
such as ATMs and telebanking (Aladwani, stronger. This research, therefore, aims to
2001; Suganthi et al., 2001). Similarly, Thai identify how corporate customers perceive
bank customers still hesitate to adopt barriers to usage of the Internet banking
International Journal of Bank
Marketing Internet banking (Larpsiri et al., 2002; provided by Thai banks.
21/6/7 [2003] 312-323
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[ 312 ]
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
Internet banking and cultural
context in Thailand
Thailand had 13 local and 18 foreign banks
offering commercial banking services at the
time of this study, although exact
categorization is somewhat obscured because
some local banks have foreign equity and
management participation. The sector is still
not completely deregulated, and foreign
banks are not yet allowed to open too many
branches, similar to other countries in the
region, e.g. Singapore (Gerrard and
Cunningham, 2003). Attempting to become
more efficient and competitive, especially
after the economic crisis, most Thai banks
have invested heavily in information
technology to provide better services to their
customers. They hope to reduce operating
costs and generate higher long-term profits,
similar to expectations by banks in many
other countries (Gerrard and Cunningham,
2003; Mols, 1998; Polatoglu and Ekin, 2001;
Sathye, 1999).
Currently, five local banks are the leaders
in providing Internet banking. These banks
provide fairly similar, standard services via
the Internet, such as checking account
balances, requesting bank statements and
reports, money transfers, loan and bill
payments, currency exchange, and opening
letters of credit. Some banks have
implemented customized and integrated
services for their corporate customers, such
as a new B2B technology ± electronic bill
presentation and payment (EBPP). According
to bank managers interviewed in preparation
for this research, banks believe this system
offers improvement over traditional bill
processing, helping customers cut costs and
improve payment efficiency.
This implementation of Internet banking is
taking place in a somewhat different
environment than in the West. Even in the
West, observers have noted that technology
may not be able to replace fully
bank-customer relationships (e.g. Howcroft
and Durkin, 2000). In general, Asian cultures
place even more value on strong
relationships in business. For example, key
account managers of banks operating in
Hong Kong view a whole set of social
relationships as quite important in
facilitating information exchange for
building and maintaining customer
relationships (So and Speece, 2000). Thai
business operates very much within Asian
relationship oriented modes. Thailand, for
example, scores very strongly toward the
``feminine’’ side of Hofstede’s masculine-
feminine dimension (e.g. Hofstede, 1997),
indicating very strong preference toward
relationships. In Hall’s (1976) terminology,
Thailand is a high context culture.
Communicated message in such cultures
depends heavily on contextual and social
cues for meaning, rather than being carried
primarily in the words (Thatcher, 2001;
Simintiras and Thomas, 1998). Strong
relationships are critical in high context
cultures, because much of the message is
absent when context does not accompany the
words.
The strong orientation toward human
relationships is invariably cited by observers
who specifically focus on Thai business
culture. For example, Holmes and
Tangtongtavy (1997) call relationships one of
the cornerstones of Thai society. Komin
(1990, pp. 132-3) says that the:
. . . Thai social system is first and foremost a
hierarchically structured society where
individualism and interpersonal
relationships are of utmost importance.
Sammapan (1996) notes that Thai people
prefer informal and personal
relationship-based communication. This
strong human orientation can make the self-
service mode of many Internet-based
financial services somewhat unattractive,
although most of the published evidence from
Thailand so far demonstrates this for
individual consumers rather than corporate
customers.
For example, Srijumpa et al. (2002) show
that lack of human interaction is actually a
strong source of dissatisfaction by individual
customers with Internet self-service offered
by Thai stockbrokerage firms. Further,
Srijumpa (2002) doubts that stand-alone
self-service will be widely accepted anytime
soon, and argues that Internet services must
be integrated into interpersonal services to
be attractive to mass markets in Thailand.
Larpsiri and Speece (2003) indicate that the
Internet/Intranet used to support sales force
automation systems in the Thai insurance
industry is much more popular with
individual customers than Internet self-
service. Sales reps use the technology to
support development of interpersonal
relationships, rather than to replace them.
Customers interviewed in that research
viewed relationships with their agents to be
essential, and were not usually interested in
direct use of the Internet themselves even for
information gathering, let alone purchase
transactions.
Preliminary indications are that rapid
growth of Thai Internet banking is similarly
restrained by customer perceptions.
Consumers are skeptical, particularly in
[ 313 ]
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
[ 314 ]
terms of trust in service reliability and
security of the Web system (Larpsiri et al.,
2002; Ongkasuwan and Tantichatanon, 2002;
Rotchanakitumnuai et al., 2003). However,
corporate customer response has received
little research attention, even though it is
likely that ultimate success or failure of
Internet banking in Thailand will depend at
least partly on acceptance by corporate users.
Literature review
The frequently cited benefits from Internet
banking do not seem to materialize in every
case, as the value of Web technology cannot
be realized if barriers are too high. Barriers
to electronic commerce in general have been
classified various ways. For example, Chircu
and Kauffman (2000) talk about
organizational, resource, knowledge, and
usage barriers. Teo et al. (1997-1998) includes
organizational, technological, and
environmental factors. Many elements in
these discussions are related to the
organization’s ability to use Internet
technology fully, which is one issue we
examine here. A second issue is about trust
in the Internet banking system and the banks
that implement it. The few studies of Internet
banking that examine barriers mention
drawbacks such as security, privacy, and
trust of Web system (Gerrard and
Cunningham, 2003; Polatoglu and Ekin, 2001;
Rotchanakitumnuai et al., 2003; Sathye, 1999).
A third factor is that legal support cannot be
implemented efficiently to assist customer
trust in Internet banking (Larpsiri et al.,
2002).
Organizational barriers
Organizational ability to utilize Web
technology capabilities is one barrier to
electronic commerce (e.g. Chircu and
Kauffman, 2000; Farhoomand et al., 2000), and
may include management attitudes, resource
constraints, and knowledge issues. A few
studies have cited negative attitudes among
some managers as a major hindrance
(Farhoomand et al., 2000; Teo et al.,
1997-1998). Negative attitudes cause
resistance to change and lack of management
commitment, reducing the company’s
resource allocation and motivation to use the
technology (Basu et al., 2002). Implementing
Web technology as a business channel
requires some additional investment and
resources, such as hardware and software.
Shortages of information technology
infrastructure remain a critical barrier in
some cases to the continuing growth of
online commerce (Chircu and Kauffman,
2000; Gilbert et al., 1999).
In addition, simple lack of experience can
inhibit adoption; higher usage intensity of
information technology in firms helps them
adapt more than is possible in less
experienced firms (Noh and Fitzsimmons,
1999; Speece, 2000). Effective implementation
of Web technology requires extensive
adaptation of customer current business
processes to enable them utilize the
capability of new technology. New skills and
new processes in an organization require
employees to learn new things. New
technology sometimes requires complex
understanding and mental capability, and
thus the technology may be difficult to
manipulate due to limited capability of firm
employees (Chircu and Kauffman, 2000).
Knowledge barriers may come from a lack of
diffusion capability, which is developed over
time by gaining related knowledge and
expertise in several areas, and the lack of
investment in training for internal
employees.
Finally, technology readiness of corporate
customers plays a role in their attitudes
toward technology. Parasuraman (2000)
conceptualized technology readiness as a
combination of positive and negative
feelings/attitudes toward technology,
roughly, people’s confidence that technology
helps improve their lives, or simply makes
things more difficult and less secure. Other
research has similarly indicated that
customers’ attitudes and beliefs about
technology are correlated with intentions to
use it (e.g. Dabholkar, 1996). In Thailand,
research among customers of stockbrokerage
firms shows that technology readiness
influences customer satisfaction with the
Internet as a transaction channel (Srijumpa,
2002). Thus, employees of customer firms
have different levels of tolerance for
innovation and organization changes, their
personal characteristics may predispose
them to be reluctant adopters.
Trust of the system
Opportunities from implementing Web
technology could be restricted if there is a
lack of customer trust in the Web system.
Trust has been defined as:
. . . a willingness to rely on an exchange
partner in whom one has confidence
(Moorman et al., 1993, p. 82).
They viewed trust as an expectation of ability
to perform, reliability, and intentionality of a
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
partner, and proposed that trust has to be
viewed as a behavioral intention or behavior
that reflects dependence on the other partner.
In addition, Morgan and Hunt (1994, p. 23)
defined trust as:
. . . the perception of confidence in the
exchange partner’s reliability and integrity.
Both definitions underline the importance of
confidence and reliability in the conception
of trust.
Customers frequently do not trust Internet
technology for three reasons: security of the
system, distrust of service providers, and
worries about the reliability of Internet
services (Lee and Turban, 2001; Min and
Galle, 1999; Paul, 1996; Ratnasingham, 1998).
Strong concern about security is one
common factor related to unwillingness to
use Internet channels for commerce (Black et
al., 2001; Greaves et al., 1999; Jones et al., 2000;
Madu and Madu, 2002). Security breaches can
lead to numerous problems such as
destruction of operating systems, or
disruption of information access (Min and
Galle, 1999). Most customers are not satisfied
with the infrastructure of Web security
systems (Black et al., 2001; Gattiker et al.,
2000). In Internet banking, security is one of
the most important future challenges,
because customers fear higher risk in using
the Web for financial transactions
(Aladwani, 2001; Black et al., 2001; Gerrard
and Cunningham, 2003; Sathye, 1999).
Reputation is important, as distrust of the
service provider is a related factor
(Jarvenpaa et al., 1999). Reputation can be
defined as the extent to which customers
believe a supplier or service provider is
honest and concerned about its customers
(Doney and Cannon, 1997). Companies must
have experience in business functions,
policy, and support personnel to build
reputations as competent technology-based
service providers to their customers. For
banks, reputation is one of the major factors
that affect customer adoption of new
technology-based service delivery (Aladwani,
2001; Mols, 1998). Reputation depends on
policy promises to customers, including
privacy policy, as most customers do not like
their personal information revealed in an
inappropriate manner or misused by others
over the Internet (Turban et al., 2002).
Customers who adopt electronic financial
services are more likely to perceive problems
related to loss of privacy, as the Internet
seemingly allows other people to access their
information easily (Gattiker et al., 2000;
Jones et al., 2000). Customers do not always
believe privacy policies will keep customer
information confident (Gerrard and
Cunningham, 2003).
Perceived risk can also cause customers to
reject new technology-based service delivery.
Perceived risk is related to reliability and
system failure (Mols, 1998; Walker et al.,
2002). Customers are also worried that
technology-based service delivery systems
will not work as expected, and lack
confidence that problems can be solved
quickly (Walker et al., 2002). Westland (2002)
found that transaction risk occurs when
online markets fail to assure that service will
be delivered with adequate quality.
Frequently, slow response time after the
Internet interaction leads to a delay of
service delivery and causes customers to be
unsure that the transaction was completed
(Jun and Cai, 2001).
Legal support issues
Many customers are concerned about legal
support for commercial usage of the Internet.
Zugelder et al. (2000) mentioned that
customer protection is the major legal issue
associated with Internet marketing. Among
other things, customer protection issues can
cover unfair and deceptive trade practices by
suppliers, unauthorized access and usage by
others, such as hackers, or system failures.
Customer protection is important for
building online customer confidence because
there is no face-to-face contact, and there is a
great possibility (at least in customer
perceptions) for having problems or making
mistakes via the Web.
With a lack of specific laws governing
Internet banking, bank customers hesitate to
use it (Larpsiri et al., 2002). For instance, in
traditional payment, corporate customers
prefer to issue a check or a transfer of money,
which requires authorized persons to
approve before the amount is paid. Payment
by Internet banking is made just by one click,
which might create financial loss. Financial
loss could derive from malfunctions of the
system, operational errors, or unauthorized
use. Problems may also rise from
intermediation by non-bank institutes, such
as hardware vendors or Internet service
provider.
In addition, Thomas et al. (1998) mentioned
liability as a key legal issue. Responsibility
must be determined when financial losses
occur in Internet transactions, and losses
must be borne by the bank, the customer, or
even other related parties in the Internet
banking system, such as the Internet service
provider. In practice, banks normally issue
Internet banking contracts or agreements
[ 315 ]
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
[ 316 ]
with limitations of their liability, noting that
the bank is not responsible for any loss
caused by the Internet banking service or
customer use of the service (Attaran, 2000).
Not surprisingly, customers might not be
very enthusiastic about this sort of clause.
Giannakoudi (1999) suggested that customer
protection laws have to determine a ceiling
on customer liability or render terms widely
regarded as unfair to be unenforceable.
Another problem of legal support for using
the Internet in commercial transactions is
the jurisdiction of the courts and dispute
resolution procedures. Disputes can arise
from many issues. For instance, the Web site
is not a branch of the bank, which makes it a
complicated task for courts to define the
location of the bank and decide whether they
have jurisdiction. In addition, online
transaction records are not accepted by some
customers owing to the difficulties in
providing authentication of electronic
transmissions. Many businesses are still
wary of making extensive transactions over
the Web because of the lack of supporting law
about electronic documents as legal evidence
(Farhoomand et al., 2000). Frequently it is
unclear whether electronic documents and
records are acceptable as sufficient evidence
of transactions (Giannakoudi, 1999; Larpsiri
et al., 2002).
Research methodology
Although research on barriers to electronic
commerce adoption is not very extensive
compared to discussion of the benefits, most
of the concepts in this study have been
occasionally examined before, but mostly in
Western context. Only a little work covers
Asia, usually Singapore or Hong Kong, which
are very developed economies and not
representative of all Asian countries. Thus,
to gain deeper understanding of the issues in
the Thai context, this research conducted a
qualitative study to explore the perceptions
of Internet banking among corporate
customers. Using a qualitative approach
provides richer detail for exploring
viewpoints in early stages of research,
allowing the researcher to gain a better
initial understanding of the problem and to
identify phenomena, attitudes and influences
(e.g. Healy and Perry, 2000; Maxwell, 1996).
The respondents were managers in the
customer firms who have responsibility for
financial functions of their companies. They
include financial/accounting officers and
managers/directors. Two groups of
respondents were targeted, the first of which
consists of seven corporate customers who
currently operate many of their financial
transactions via Internet banking. The
second group consists of eight non-Internet
banking customers. They were all selected by
judgment sampling to cover a range of
industries, e.g. finance, leasing, insurance,
airline, manufacturing, and dot-com
companies (Table I). Judgment of the
researcher was based on consensus among
several bank officers that the respondents in
either group could be considered ``typical’’
banking customers, representative of their
industries, and capable of using Internet
banking if they chose to. Given the strong
traditions of ``business secrecy’’ in Asia, an
additional criteria was that we chose
companies where we had sufficient
connections to gain access.
The qualitative research consisted of
face-to-face in-depth interviews with
corporate customers of banks that offer
Internet banking. The interviews were
conducted in a semi-structured format that
allows respondents to express their own
viewpoints (Flick, 2002). A set of interview
topics guided the interviews, with a list of
probing questions to draw out respondent
opinions. Topics were discussed as
respondents brought them up, occasionally
supplemented by new issues that arose in the
interviews. The interview included customer
perceptions of both benefits and barriers,
although this paper is only about barriers.
There was no bias from forcing respondents
to focus only on positive or negative issues.
They could, and did, bring up both.
All in-depth interviews were conducted in
Thai language. (Quotes in the discussion
were translated into English by the first
author.) Extensive notes were taken during
the interview. We highlighted key issues
mentioned from each interview and
combined the most common issues
mentioned by the interviewees. To identify
the major barriers to Internet banking, a
qualitative content analysis is used for
paraphrasing the range of significant issues.
Passages and rewordings with the same or
similar interpretations were summarized
and categorized according to the barriers
schema discussed above, although these
categories were internal, not revealed to
respondents. Then adopters and non-
adopters were contrasted to determine
possible differences.
Findings: trust is a major barrier
The content analysis determined nine
critical barriers to Internet banking, which
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
Table I
Respondent profile
Indu stry
Internet b ank in g us ers : U se r1 -7 )
Larg e m anufactu ring com pa nies
F inanc e and sec urities
H ote l reservation dot-com co m pan y
N on -Intern et bank in g us e rs : N on-us er1 -8 )
Insurance
Lea sing
H ospitality
A irline
fall roughly into the three broad categories
discussed above. Three barriers relate to
trust issues: security, reliability of
transactions, and trust in the service
provider, including about privacy. Security
is one of the major barriers. The interviews
among Thai corporate customers indicate
that most Internet banking customers have
adopted Internet banking as an alternative
channel for their customers to make payment
to them, but they do not use Internet banking
for their own money transfers to other
parties. This is because of concerns about
security of the communication network. The
following statements highlight this issue:
Although we use Internet banking, our
company is concerned about security of
Internet banking at some level. We believe
that banks must also be concerned about
security and invest intensively in security
infrastructure. The reason is that most
hackers normally prefer to hack directly
through the bank financial systems. If any
financial loss occurs to bank customers
(because of this), banks have to [be]
responsible for that loss (User1).
We adopt Internet banking as an additional
channel for customers to make any payment
to us. For internal financial transaction, such
as employee salary, payment to suppliers, we
use other service delivery channels, e.g.
traditional money transfer or cheque
payment (User3).
Non-Internet banking customers prefer to
receive services directly from the banks, and
have not even set up channels for their
customers to use. These customers are not
necessarily technology averse, e.g. some of
them use non-Internet proprietary online
banking software (sometimes called video
banking in Thailand) which enables banks to
transfer funds or pay bills directly to bank
customer accounts. However, non-Internet
banking customers stay with services which
are either less technologically advanced or
are more closed systems, because they
N o. o f respo ndents P o sition
4 Ac cou nting/fina nce m a nagers
2 M ana ging dire ctor/vice-pre sident of fina nce
1 M ana ging dire ctor
2 Fina nce m ana gers
2 Fina ncial c ontroller and officer
1 Fina nce direc tor
3 Ac cou nting/fina nce m a nagers
believe that the Internet is an open
technology with easy accessibility, and thus,
is not secure. Representative of these views
are two quotes from respondents:
I have to remember my user name and
password. I am afraid that if unauthorized
personnel of my company know the password
by chance or even deliberately, there will be
financial risk to our company (Non-user2).
I prefer to use traditional systems, changing
to Internet banking is not secure enough for
financial functions that need elaborate
procedures (Non-user3).
The two groups of customers also perceive
reliability at different levels. Internet
banking customers believe that Internet
banking has some level of reliability, even
though in absolute terms, it is not considered
highly reliable. Non-Internet banking
customers are not confident at all about
doing financial transactions via the Web, and
perceive Internet banking as highly
untrustworthy. The following statement
illustrated this point:
Business transactions normally have a great
amount of money and one click may create
any fraud to the firm’s financial system. I
don’t want to absorb the financial risk and
responsibility, our financial processes
require originals and many copies of
documents for internal control and
signatures (Non-user4).
Another important issue which Internet
banking users brought up is that when
problems occur while making transactions
via the Internet, the problem cannot be
immediately resolved. Internet banking
users have to go to the bank to solve such
problems, which is time-consuming. One
Internet banking user indicated that his
company prefers to use Internet banking
provided by Thai banks instead of using
foreign banks, because Thai banks have more
branches that can be reached to have such
problems solved.
[ 317 ]
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
[ 318 ]
In addition, some Internet banking users
are dissatisfied with the low speed of Internet
banking response, which results from
deficiencies in infrastructure for the Internet
communication network. This causes slow
feedback and slow transaction response.
Their perception of convenience seems to
shift once they are experienced on the
Internet, and they view slow Web sites as
inconvenient. Slow physical response to
transactions is perceived as even more
inconvenient. For example, the Managing
Director of one finance company highlighted
the importance of system response:
Response time is dreadful, it’s very slow and
keeps me waiting for ten minutes to confirm
the transaction (User5).
Finally, Internet banking customers seem to
choose banks which they believe have more
experience in using technology-based service
delivery, which is one major factor that
contributes to customer trust and helps them
decide whether to adopt the new service from
that bank. Internet-banking customers stated
that they would have less confidence using
technology-based services from banks
inexperienced in the technology.
Customers are also concerned about
privacy in Internet banking systems, but not
as much as security. Most respondents
believe that they have already lost control of
their personal information because Web
information systems facilitate the
increasingly effective dissemination of
information about customers. One
respondent said that he believes banks use
customer information without customer
consent whatever service delivery channel is
used. It might be somewhat easier to misuse
customer information if it is on the Internet,
but privacy is not very safe anyway, on- or
off-line. Some customers were not as cynical,
but many believe that bank privacy policies
are essentially the same, regardless of which
service-delivery channel is used.
Legal support issues
Three concerns about legal support were
prominent among respondents: ability of the
courts to resolve Internet banking disputes
efficiently, fair liability for bank customers
in responsibility for any financial mistakes,
and privacy protection. Both users and
non-users know that Thai electronic
commerce law has just been implemented,
but they believe that courts cannot yet
resolve Internet cases efficiently. It may take
time to learn the justice processes, especially
how to trace online evidence. Furthermore,
they are concerned about documentation
which can be used as financial evidence,
because such documents cannot be
completely provided by Internet banking.
Partly because of this, many respondents feel
that Internet banking mainly provides
information benefits to them at the moment.
Even users are mostly not conducting higher
level complicated financial services, but
mainly do such things as check balance, view
statements, and sometimes transfer money.
Non-Internet banking users are even more
concerned about the liability agreement that
banks always impose upon customers, as
shown in the following complaint:
Bank customers have to be the party
responsible for any mistakes, whether caused
by the customer or the system (Non-user7).
Internet banking users are more optimistic
on this issue. One respondent mentioned that
he believes the bank can assist in tracing any
mistakes made by bank customers. The bank
also has log files to keep track of contact by
its customers, which can assist in solving
problems.
Organizational barriers
Our research found three key aspects:
management negative attitudes, lack of IT
resources, and lack of knowledge to most
effectively use Internet banking. Users seem
to consider lack of management support as
relatively unimportant. They have good
management support for Internet banking
adoption, which leads to information
technology know-how and trained personnel
in the use of Internet banking. For non-users,
the lack of management support had the
highest frequency of mentions, indicating
that this is one of the most important drivers
of Internet banking adoption. The following
statement demonstrates these issues for non-
users:
Our management does not have the policy to
have any financial transactions via the
Internet. The corporate financial system is an
important system and it has its own
characteristics. If we use Internet banking
and have problems, it could cause us to have
financial loss that sometimes could put us in
trouble (Non-user4).
Lack of information technology resources
was cited frequently among non-users as one
of the barriers to new information
technology adoption. Non-user customers are
reluctant to invest more in Internet
technology. One non-user customer
mentioned that:
Siriluck Rotchanakitumnuai We don’t have a policy to invest more in
and Mark Speece information technology, especially to
Barriers to Internet banking subscribe for the high performance speed of
adoption: a qualitative study
among corporate customers in Internet service for making financial
Thailand transactions with the bank. It’s not worth
International Journal of Bank enough to invest more and have transaction
Marketing risk (Non-user5).
21/6/7 [2003] 312-323
The knowledge barrier was the least
mentioned among all the respondents. Most
companies have educated personnel who can
use computer access through the Internet.
However, non-Internet banking users are
more likely to have fewer knowledgeable
personnel to deal with technical problems,
whilst Internet banking customers reveal
that this issue is quite trivial for them.
Overall, Internet banking users had some
level of positive attitude about using the Web
channel, as illustrated by the following
statements:
We get pretty good service from Internet
banking, our business groups are now
adopting this system in many companies. We
keep on using the service from the bank
because it can make our operation more
efficient. It really decreases our costs and
increases profit to us (User2).
As long as no other banks provide a better
offer to my companies, I will continue use the
service from the current bank (User6).
Conclusions and implications
These in-depth interviews demonstrate that
there are still some serious barriers to
adoption of Internet banking by Thai
corporate customers. The barriers are
stronger for the non-users, but even users are
not entirely comfortable with Internet
banking, and have not switched most of their
transactions to the Internet yet. Table II
summarizes the three main types of barrier
to Internet-based service delivery discussed
here. Trust is one of the most critical issues,
including worries about security of the
system, low reliability of transactions, and
distrust of the service provider. Security is a
frequently cited obstacle (Gerrard and
Cunningham, 2003; Jun and Cai, 2001;
Polatoglu and Ekin, 2001). In our research, all
customers have this concern, but
non-Internet banking customers have greater
levels of worry, do not have confidence to
make any financial transactions via the Web,
and have no intention of changing to Internet
banking.
Reliability of transactions via the Internet
banking system is another major concern
among all customers, but again, stronger
among non-users. Users do worry about
reliability of this new service, but are more
confident that the bank can solve problems
that arise. However, they prefer to deal with
banks that have many branches, so that it is
easy to go to the bank when the problems do
occur. This has important implications for
staff training in the branches. Even though
the branches are not responsible for
implementing the Internet banking, there
must be someone in each branch trained to
handle common Internet problems, and who
knows where to go for help within the bank
for more complex problems.
Finally, trust is related to experience with
the bank and bank policy, which contributes
to customer trust in bank business practices.
The bank’s overall reputation combines with
reputation in technology-based service
provision to make banks more or less
attractive. All of these trust issues would
make it difficult for new entrants, especially
purely virtual banks, to make much rapid
progress in developing markets among Thai
corporate customers. With no prior
relationships to customers, no strong
reputation, and no visible prior experience
with the technology, customers are unlikely
to trust Internet banking services.
Thailand is currently in the early stages of
developing e-commerce law, and customers
believe the country still lacks ability to
protect bank customers sufficiently in cases
of financial loss via Internet banking, and to
trace online evidence and to resolve cases
fairly. Further, customers are not happy with
the legal support for privacy protection in
Internet banking. They do not worry about
this issue as much because they generally do
not believe that Thailand has very strong
privacy protection in any service delivery
channel. Banks do not have to wait for Thai
law to catch up here, they can take the lead in
devising policies and enforceable Internet
banking contracts, which customers think
are more fair than much of current practice.
Some of the trust and legal issues are
partly perceptual, thus managerial attitudes
are one key organizational barrier. Support
or lack of desire from top management for
beginning to use Internet banking seems to
be critical in adoption. Non-users have quite
negative attitudes toward adopting Internet
banking to replace traditional financial
procedures. In addition, non-Internet
banking customers do not want to invest
much in information technology or training
to support Internet banking adoption.
Internet banking customers are not really
concerned about this problem much because
they already have more capability. However,
even Internet banking customers do not use
this channel very extensively yet. Thai
[ 319 ]
Siriluck Rotchanakitumnuai
and Mark Speece
Barriers to Internet banking
adoption: a qualitative study
among corporate customers in
Thailand
International Journal of Bank
Marketing
21/6/7 [2003] 312-323
Table II
Barriers to Thai Internet banking
B arrie rs Inte rnet b ankin g use rs N on-In te rnet ban king users
T ru s t of the s ys tem
S ecurity Lo w e r le vel of c oncern Gre ater leve l of co ncern
R eliab ility of transaction Lo w e r le vel of c oncern Gre ater leve l of co ncern
T ru st of the bank Lo w e r le vel of c oncern, but pre fer to Do not trus t the Internet-ba sed
u se Inte rn et bankin g p rovide d by Thai servic e channe ls
b anks, w ho have m any bran ches for
a cces s w h en custom ers h ave problem s
Leg al su pport
F air lia bility Lo w e r le vel of c oncern Gre ater leve l of co ncern
C ou rt ca pability to solve online Lo w e r le vel of c oncern Gre ater leve l of co ncern
c ases efficiently
P rivacy prote ction E qua l leve l of con cern Equ al level of c oncern
O rg a nizatio nal b arriers
M an agem en t a ttitude P o sitive attitudes tow ard adoption Ne gative a ttitudes tow ard adop tion
Lac k resou rce H ave sufficien t IT resource s Lack IT resou rces
Lac k kno w ledge H ave m ore tech nica l kn ow ledge H ave le ss tech nica l kn ow ledge

corporate customers still prefer face-to-face
interaction with the banks. With trust such a
strong issue, it is unlikely that this desire for
close relationships will disappear. This
suggests that banks will mainly develop their
Internet banking from their current
customer base. It seems unlikely to be an
effective way to attract many new customers
in the early stages of development.
To begin overcoming customer distrust of
the system, banks need to visibly
demonstrate concern for security, reliability,
and liability with concrete solutions to
reduce or eliminate costs to customers in
case transactions fail or are processed
inaccurately. Often, these are not purely
technical issues, but rather, are related to
process design, or, sometimes, partly to
customer psychology and beliefs, which may
or may not be consistent with the actual
technology and system. All customers, even
users, believe that problems will occur, so it
is about what customers believe the bank
will do when the problems do arise. The
Internet channel must be well integrated into
other channels so that customers can easily
interact with people who are trained to
handle problems efficiently, and banks must
adopt strong customer orientations.
Aside from the usage barriers, our
research indicates that current users feel
Internet banking is the good channel for
some interactions with the bank. If it is well
integrated into the overall business, the
Internet can enable banks to provide more
customized service, and stronger
personalized relationships. Thus, customers
do not seem to see the Internet as a channel to
replace traditional relationships, but rather
as a way to supplement and enhance the
relationships. This is consistent with the
cultural environment, and with the
discussion in Howcroft and Durkin (2000),
who caution that customer-bank
relationships cannot be ignored when
implementing Internet banking.
Banks frequently view Internet banking
as essentially a cost reduction mechanism,
both for themselves and for customers, but
customers see quite a lot of potential new
costs, partly because the new channel is
perceived as much more risky.
Relationships are a mechanism for
reducing risk in more traditional business,
and probably must also be part of the
Internet banking system if it is to be widely
accepted in Thailand. Customers clearly
say that the Internet service channel offers
potential, but even users feel that it does
not deliver much value yet compared to the
problems of operating on the Internet.
Thus, improving patronage at this stage of
development seems to be mainly a matter of
lowering barriers not improving benefits,
and much of the work on lowering barriers
seems to be about learning how to integrate
the Internet into interpersonal
relationships with customers.
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